In his work for us on salaried employment, my colleague Abhishek Waghmare finds, as you would expect, that most of the conditions of employment around salaried work are marked improvements upon the other forms of working arrangements out there - casual work and self-employment. That's why the big shift a country would like to see is an increase in salaried employment. But there's a further dimension here.
Although salaried work attracts higher wages compared to other arrangements of work, Abhishek finds that the average income from salaried work has declined over the last decade in real, or inflation-adjusted, terms. To do this, he uses the national Consumer Price Index to 'deflate,' or apply the effects of inflation to, the nominal wage information collected in surveys over time.
He finds that the monthly average salary in India increased by about 90% from 2012 to 2024 in nominal terms, meaning that it nearly doubled in just over a decade. But adjusting for inflation, the average salary actually fell 4% over the period. (You can read more details of the methodology he used for this calculation in the piece.)
Driving this fall was a decline in the inflation-adjusted wages of people in high-skilled and high-earning jobs in particular. So the inflation-adjusted incomes of office clerks, drivers, domestic workers and garment workers actually grew slightly from 2012 to 2024. Software developers, college teachers, and protective services workers such as police personnel across the private and public sectors, on the other hand, saw their real incomes fall.
If this doesn't square with the narrative around skyrocketing salaries, it's worth remembering that each of these occupations employs several million people, and there is great heterogeneity in the skill levels, and as a result, in the salaries as well. As with most broad statistics in India, some groups have seen sharp growth, but the distributed reality is far more sobering.
